The Provincial Government announced in late 2018 that it was removing rent control across all newly-built or newly-converted rental units in Ontario. Here’s what it means to you.

What this Means to Renters

  • For renters, the new rent control rules will remove their ability to predict rental increases and to budget accordingly. As has been the case in the past decade, low-income earners have been pushed out of high-priced areas across Toronto and this is likely to continue to be the case.
  • If you’re low-income or a young person who is not attending university, it is likely going to mean having to search on the outskirts of the GTA or possibly in another city to find affordable housing. Although some have argued the removal of rent control could lead to lower rents and increased supply of rental units, there’s no evidence suggesting this to be the case in the near future in regions like Toronto.

What this Means to Investors

  • For investors and builders, this is somewhat good news as it encourages building more rental apartments and also provides investors the opportunity to charge whatever they wish for rent.
  • In a highly competitive renter’s market like Toronto, even if a certain demographic of people unequivocally cannot afford to live in your rental unit, there will likely always be someone willing to do so.
  • As a landlord, you’re no longer obliged to follow any regulation as it pertains to rent increases and gives you the freedom to move your rent up according to what’s happening in the market around you.

Another point that needs to be made is the government’s Housing Supply Action Plan is all about boosting supply. It’s believed removing rent controls and other regulations will allow more developers and builders to commit to new projects. In a highly competitive market like Toronto, that means more investment opportunity and more cash flow.

Any time there’s a big real estate regulatory change like this, it’s going to have positives and negatives attached. For real estate investors and property owners looking to reap rewards from the rental market, this is more freedom to move along with market forces and charge a rent price that’s properly in line with what the market dictates.